Citizens' Issues
Issue small, fallout fearsome!

A military veteran laments the government’s apathy towards the Indian armed forces with respect to pension and the lack of leadership could turn out to be disastrous

The issue of ‘One Rank One Pension’ (OROP), for the military services, has been heating up for a long time. More recently, India has seen its 2.3 million ex-servicemen—the most disciplined and law-abiding class in our society—having to publicly protest and return their medals, with petitions signed in blood, to draw government’s attention. Unlike their Indian Administrative Services (IAS) and other civil services brethren, military services soldiers do not have ‘Associations’ to hold rallies and demonstrations to express their grievances. Ex-servicemen (or ex-military services personnel) are, therefore, neither used to nor temperamentally inclined to make public their woes—a virtue the nation must respect. Yet, if an increasing number of them are now resorting to such methods, it must become a cause of concern for the government.


The arguments citing burden on the national exchequer and risk of triggering similar demands from other central civil services are unfair and unjust because there is no similarity in the job profiles of civil and military services. The rationale behind such rival claims would, therefore, be grossly faulty and scantily-clad mischief aimed at perpetuating the ongoing neglect and systematic suppression of the military and its retiring/retired soldiers. There are ground realities that further reinforce the genuineness and urgency of not only the grant of OROP to the ex-servicemen but also the importance of restoring the lost dignity, morale and well being of the nation’s muscle power—Indian Armed Forces:

  1. Significance of Military ‘Rank’: The hierarchy of military leadership is based upon visible badges of rank and embellishments on the uniform worn by officers and JCOs/NCOs (Junior Commissioned Officers/Non-Commissioned Officers). All professional and social protocol of inter-action is governed by the status and authority carried by respective rank, in the hierarchical order. Legally and traditionally, the Armed Forces personnel carry their rank even on retirement, as a legacy, whereas in the active military service no junior can get more salary than his senior in the same rank. This equation is, ironically turned upside down, as we have juniors retiring later getting more pension than their seniors who retired earlier in the same rank. It is ridiculously embarrassing besides being unjust in every respect.
  2. Serving and Retiring at a Loss: The majority of jawans and officers retire 10 to 20 years earlier than their civilian brethren, thereby losing service benefits, pay and allowances of higher ranks for those many years. The necessity to maintain a youthful military profile leads to jawans and JCOs retiring when they are still in the age group of 38 to 48 years and officers at 50, with their kids still too young and parents too old, with expanded family responsibilities. Civilians, on the other hand, get to serve up to 60 years and retire happily after reaching their final pay bands, with their children well settled and life’s basic commitments largely accomplished. These harsh terms and conditions of service results in heavy financial loss at the most crucial stage of a soldier—when he needs financial security most. Since almost all civil government employees reach their final post/pay band, they naturally retire having earned highest pension scale in their stream, which virtually translates to a more remunerative deal than the OROP demanded by ex-servicemen!

Accordingly, if military personnel chose to invoke the “principle of equity”, they should rightfully be demanding the highest pension grades in the corresponding running pay band of sub-major in respect of JCOs/OR (other rank) and the final scale of Senior Administrative Grade (SAG)/Higher Administrative Grade (HAG) (Major General/Lt General) in respect of officers since similar dispensation is in vogue for civil services.

  1. Unequal Career Growth Options: Whereas nearly all civilians make speedy career advances, in secure environs of their pre-specified state cadres/deputations and reach their highest rank/pay bands, the majority in the Armed Forces (jawans and officers) find themselves out of job even though they fulfil the laid down criteria for career advancement/promotions.  A look at this career contrast: While over 90% of the IAS officers reach secretary/additional secretary level and none retires below joint secretary rank, only 0.02% of the Armed Forces officers make it to Army Commander level, 0.15% to other Lt General levels (Corps Commanders and others) and only 0.4% to Major General level (even after the recent cadre enhancement!). Because of the constricted pyramidal organisational structure of the Forces, a large number of competent officers fully eligible for higher ranks have to be wasted out every year. Caught in a whirlpool of systemic adversity, large numbers of qualified officers get neither their deserved pay nor pension.  Likewise, the majority among jawans too reach no further than Honorary Havildar level, whereas almost all lower division clerks (LDC) in central services and all constables are assured to retire at least as Section Officers and sub-inspectors respectively reaping highest returns until and after 60 years of age. Military personnel obviously deserve to be appropriately compensated for the losses they are suffering due to early retirement and short-changed dispensation due to restricted career opportunities, early loss of job and resultant loss of salary and pension.
  2. ‘Unique’ Service Conditions: Forfeiting their fundamental rights our jawans and officers not only serve in extremely hostile terrain and climate but also spend the better part of their lives separated from their families with no guarantee of even weekly holidays and festivals. From fighting at the world’s highest battlefield where hostile terrain and weather claim more lives than from enemy fire, to operating in jungles and deserts far away from the comforts of civilisation, soldiers lead an unusually tough life which is unseen and unimagined in normal civil life. These extraordinary service conditions make the Armed Forces uniquely distinct and incomparable with any other Service in the country. Recognising this uniqueness of the Defence Services, the government has already decided to have a separate pay commission for the Armed Forces in the future (as announced in the Lok Sabha by the defence minister on 13 July 2009). The crucial details as to how such a pay commission would be constituted and how equal to or independent of the other the central civil services pay commission it would be have not yet been made public.
  1. Nation’s Last Resort: In spite of the back-breaking economic recession, it is primarily because of its superior military might that the United States is in a position to assert its will and authority, coercively, over any country in the world, disregarding dissent, if any, from any power in the world. It is through a credible military deterrent that a nation’s diplomatic and political strides find meaning and gives the economy its protective cover. Few countries have used their military might more than India to defend borders and maintain order. With a history of four wars since Independence, incessant insurgencies and expanding terrorism, India should be imparting lessons to the world on the importance of maintaining a powerful and motivated military. The government and the people alike have always turned to Fauj (Armed Forces) for speedy solutions—from Siachin to Arunachal to Kanyakumari, for anything too serious or too dangerous i.e. natural calamities, epidemic, riots, disruption of essential services, failure of civil administration and even for salvaging the national honour in fiascos like the CWG footbridge collapse. Others raise their hands, stand aside and watch. But has the Fauj ever belied nation’s faith in its Armed Forces? Their failure, God forbid, if ever so it were, would be a national disaster.

The treatment being meted out to the Armed Forces in India has hurt serving and retired soldiers alike. A calculated and systematic method is seen clearly at work in degrading the position and prestige of military ever since the Fourth Pay Commission.  Every successive pay commission has pushed Armed Forces a few notches below their deserved niche. The way the Ex-servicemen’s demand for OROP proves that there are anti-military forces aggressively at work to deprive soldiers and ex-soldiers of their genuine dues. In all fairness, bureaucrats found guilty of delaying and denying military dues and entitlements must be severely dealt with and even prosecuted for their inefficiency and anti-national outlook. This must be particularly ensured in cases where the political leadership and/or the higher judiciary have ruled in favour of the military. The case in point is the ex-servicemen’s demand for OROP, which has been long lost in bureaucratic machinations despite its non-controversial character and unanimous support from all parties that have ever deliberated over this demand. It is clear from the following facts on record:

  1. Grant of OROP has been repeatedly recommended by successive Parliamentary Committees over the years.
  1. Nearly all major political parties, including Congress and the BJP, have supported the long pending OROP demand in their election manifestoes. The UPA chairperson, Sonia Gandhi has, on record, declared her support in favour of ex-servicemen on this score in her public utterances and media interactions.
  1. Observations and directions passed by the judiciary (including the honourable Supreme Court) in a number of cases relating to disparity in pay & pension of ex-servicemen have favoured removal of disparity on this issue. An anguished Supreme Court has gone to the extent of admonishing the authorities for treating soldiers/ex-soldiers like ‘beggars’.
  1. The committee headed by the cabinet secretary found it hard to refute the legitimacy of OROP demand. However, while the committee largely accepted the essence of the demand in respect of the JCOs/OR or Personnel Below Officer Rank (PBOR), in the case of Commissioned Officers, it stopped just short of according parity between pre and post 01-01-2006 pensioners. (Statement of AK Antony, minister of defence in the Lok Sabha on 13 Jul 2009). Confounding the simple issue, the committee’s convoluted recommendations, at best, halved the injustice to officers by introducing an absurdly misleading idea “modified parity” as if there could be such a thing as “modified truth” or “starve & enjoy”!

Unfortunately, a skewed impression has been created about the genuine requirements of the serving and retired soldiers as if these were nothing more than their welfare demands.  The seriousness of repercussions of such distorted views, in weakening the vitals of our national defence, is indeed grave because the nation’s defence potency will be only as strong as the motivation of its soldiers. Their well-being must, therefore, be viewed as national imperatives and not merely questions of their welfare. Since every serving soldier is a future ex-serviceman, repercussions of decisions on issues like OROP directly affect the psyche of fighting soldiers as well. The simmering disgruntlement among the soldiers and ex-soldiers raises serious questions on the state of morale and motivation of our Armed Forces. Nothing can be more perilous for a country than an impoverished leadership in the wake of continuing government apathy towards a demoralised military on basic issues such as OROP.


(The author is a military veteran and author of two international bestseller books on Leadership Development.)




5 years ago

A well articulated and gracefully presented article on an issue which should get the attention of GOI at the highest level. Let me keep on record that there are other more serious dangers waiting, like gradual dilution of the pension scheme itself for armed forces(when New Pension Scheme was introduced for central government employees through back door in 2004, defence forces were excluded with an adjective ‘initially’ or some similar sounding word). The country is being taken for a ride by the present BPL(Businessmen-Politicians-Lawyers) leadership. One wishes sane advices like that contained in this article (this is not a prayer, it is a rightful demand and so I would like to call it an advice and not a plea) opens the eyes of those who can guide the powers that be.

IRDA to frame policy for automatic clearance of life products

IRDA, in consultation with insurers, will identify or design certain standard products which can be used by the industry under Use and File system

New Delhi: Insurance Regulatory and Development Authority (IRDA) will come out with a new policy to accord automatic clearance to the standard life insurance products and relax investment guidelines to encourage fund flow into infrastructure sector, reports PTI.
"Use and File system may be introduced. IRDA, in consultation with insurers, will identify or design certain standard products which can be used by the industry under Use and File system, if the insurance company complies with the conditions attached to the standard product," Finance Minister P Chidambaram said.
He was briefing reporters on decisions taken to give a fillip to the life insurance industry.
At present, IRDA approves all insurance products on File and Use basis which means that insurance companies can sell the product only after getting approval from the insurance regulator.
Chidambaram had earlier this month met the heads of life insurance companies and IRDA chairman J Hari Narayan to work out steps to boost the insurance sector.
He said in a country with low spread and penetration of life insurance, the objective should be to sell simple and easily understood products.
Such products will automatically be deemed to have been approved after 15 days of its intimation to IRDA unless it finds non-compliance within that period, he said.
IRDA shall take necessary action against the company in case any violations are noticed, Chidambaram said, adding, the regulator should expand such list of standard products on a continual basis.
In order to encourage investments in infrastructure sector, he said, IRDA will allow investments in an infrastructure special purpose vehicle (SPV) floated by any company.
Under this, the SPV should be a wholly-owned subsidiary of the parent company and the debt instrument issued by the SPV is guaranteed by the parent company, having due regard to rating criteria.


Government looking at tax sops for life insurance policy holders

The slew of incentives being considered by the Finance Ministry for boosting life insurance industry include reduction in service tax on first premium, separate tax exemption limit for pension plans and greater incentives for agents selling policies

New Delhi: Life insurance policyholders can look forward to more tax concessions with Indian Finance Minister P Chidambaram asking the revenue department to look into the possibility of removing service tax on first premium and creating separate exemption limit for pension schemes, reports PTI.
Chidambaram said he has asked the Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC) to give their report on the changes in the tax structure for life insurance companies by 10th October.
The slew of incentives being considered by the Finance Ministry for boosting life insurance industry include reduction in service tax on first premium, separate tax exemption limit for pension plans and greater incentives for agents selling policies.
The Ministry has formulated this proposal following a review of life insurance sector in consultation with heads of various companies and Insurance Regulatory and Development Authority (IRDA) chairman J Hari Narayan.
"Department of Revenue will examine whether, in addition to National Pension Scheme (NPS), some insurance pension products as approved by IRDA may be included in the separate limit over and above the limit of Rs1 lakh under section 80C of the IT Act for the purpose of income tax deduction on premium paid," Chidambaram said.
The Revenue Department, Chidambaram said, would also look into the proposal of exempting annuity policy from service tax in line with NPS and also reducing the levy on single premium products.
With regard to social security insurance schemes, he said the tax authorities would examine whether first year premium and subsequent premiums on such schemes like Janshri Bina Yojana (JBY) and Aam Adami Bima Yojana (AABY) could be exempted from service tax. Also the possibility of exempting micro-insurance from this levy.
He further said a similar exercise would be done for the non-life insurance sector. 
Chidambaram said the CBDT would consider whether the total sum paid for post-retirement medical scheme could be made eligible for income tax deductions.
To encourage agents, Chidambaram said the CBDT would look at the possibility of tax deducted at source (TDS) rules.
"At present, TDS applies on every payment of commission to an agent above Rs20,000. CBDT will examine whether the exemption can be shifted from every payment of commission to a cumulative commission payment exceeding, say, Rs50,000 or any other suitable threshold in a year," he said.
The CBEC will be requested to examine whether service tax may be assessed to realisation basis, he said.
At present, service tax is levied on premium on accrual basis. So even if the actual realisation does not happen, the life insurance company has to pay service tax based on accrued or assumed income.
"CBDT will examine whether existing policies can be grandfathered whenever changes are made to direct tax laws, so that changes will apply only to policies issued prospectively," he said.
The proposed amendments to the insurance laws were also discussed with IRDA, he said, adding, some of the issues raised by the insurance companies have already been addressed in the Insurance Laws (Amendment) Bill, 2008, that is pending before Parliament.
In respect of some other issues, further amendments, if necessary, will be introduced as official amendments to the pending Amendment Bill, he added.




5 years ago

All this talk is only about the "Life Insurance". Not a wpord abou the Medi-claim /Health Insurance policies ,especailly for the 130 million Senior citizens (No. Growing up fast). If a person is paying a hefty sum of Rs. say 30K per annum + ST on a Medi-claim policy, why the IT exemption should remain bogged down to mere Rs. 15K ?
very sad economics of the Govt. headed by an Economist .
Perhaps here also, the Govt. only wants to appease the salaried persons or the Govt./Semi Govt. employees.
This is also a "Tough Question" to be answered by this Govt.

Mohan Siroya

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